PREIT Sells Whole Foods Parcel in Philadelphia

Whole Foods Market at Plymouth Meeting Mall. Image courtesy of JLL Capital Markets

PREIT has sold the 65,155-square-foot Whole Foods Market parcel at Plymouth Meeting Mall in Plymouth Meeting, Pa., as part of its capital raising initiative. JLL Capital Markets brokered the $27 million transaction on behalf of the seller.

PREIT will utilize the funds generated from the transaction to reduce debt and enhance its balance sheet. According to CommercialEdge, Plymouth Meeting Mall is subject to a $384.5 million Wells Fargo Bank portfolio loan.

Whole Foods Market features a taco truck, a rooftop patio and dining areas. It also includes a parking garage with direct access to the market, a private event space and a Cold Point Pub venue. In 2009, the grocer signed a 20-year lease, and now has a remaining lease term of eight years, as well as five 5-year renewal options.

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Having served almost 1 million customers in the last 12 months, Whole Foods Market neighbors other consumer traffic drivers at Plymouth Meeting Mall, including LEGOLAND Discovery Center, Plymouth AMC Theater and Dave & Buster’s. Located at 500 W. Germantown Pike, the property offers connectivity to Interstates 276 and 476, being exposed to an average daily traffic of 300,000 vehicles.

Senior Managing Directors Jim Galbally and Chris Munley, along with Managing Director Colin Behr, led the JLL Retail Capital Markets Investment Advisory team representing the seller in the transaction.

Grocery-anchored assets stir up investor interest

Investor interest in standalone grocery stores and grocery-anchored shopping centers remains robust, even as the capital markets landscape continues to change, Galbally said in a prepared statement.

According to a recent report by Cushman & Wakefield, the retail sector experienced growth in the fourth quarter of 2022, resulting in a historic low for the average shopping center vacancy rate. The figure dropped by 20 basis points to 5.7 percent, with net absorption reaching 10.9 million square feet.

In Philadelphia, a negative net absorption that totaled -117,539 square feet was registered, while vacancy stood at 6.9 percent.

Retailers are constantly striving to meet consumer demand, given changes in consumer behavior, economic uncertainty and ongoing supply chain challenges. Although supply chain issues are expected to improve this year, the supply-demand imbalance is likely to persist.